HMRC: Tax relief for Entrepreneurs

Date: 29th February 2008

Draft legislation as been released outlining a new tax relief scheme for entrepreneurs.

The new "entrepreneurs' relief" will come into effect on April 6th - replacing the current Capital Gains Tax (GT) taper relief.

Tax relief will be effective on profits made from the sale of businesses, business assets and on gains made by individuals running a company.

HMRC says the first £1 million of gains will be taxed at a rate of ten per cent, with everything above that subject to a rate of 18 per cent.

Plans to reform CGT were announced at the pre-budget report.

According to HM Revenue and Customs: "As part of this change the tax-free annual exempt amount (currently £9,200) will remain, but taper relief and indexation allowance will be withdrawn."

CGT does not have to be paid on income generated from selling a car, winning the lottery, Isas and on personal belongings sold - under the value of £6,000.